Chinese Copper Concentrate: Tender Results Weaken, Processing Fees Continue To Decline.

Due to the weak bidding result of a large mining company, the copper concentrate processing and refining fee (TC/RC) in China continued to decline last week. The weekly index of refinery purchase by Agence France-Presse on March 6th dropped to -56.50 US dollars/ton and -5.65 cents/pound, lower than -51.60 US dollars/ton and -5.16 cents/pound on February 27th. The purchasing index of traders also dropped from -108.80 US dollars/ton and -10.88 cents/pound during the same period to -111.20 US dollars/ton and -11.12 cents/pound. The weekly average TC/RC index of Agence France-Presse on March 6th dropped to -83.85 US dollars/ton and -8.385 cents/pound, lower than -80.20 US dollars/ton and -8.02 cents/pound on February 27th. Last week, a large mining company awarded its refinery purchase bidding at -58 US dollars/ton and -5.80 cents/pound based on the M+3 pricing period and shipment in April; it was significantly lower than the -49.00 US dollars/ton and -4.90 cents/pound awarded in January. In the spot market, a batch of copper concentrate was sold at a processing fee of -56 US dollars/ton based on the M+3 pricing period and shipment in March. The trader's quotations have weakened to -58 US dollars/ton to -60 US dollars/ton in the middle range, while the refinery counter-offers have been at -50 US dollars/ton in the middle range to -50 US dollars/ton. Market experts said that the strengthening of the by-product sulfuric acid price is expected to exert further downward pressure on the processing fee of copper concentrate in the short term. Given that the supply of copper concentrate remains tight this year, if the income from sulfuric acid increases the profit space of the refineries, the sellers may further lower the processing fee quotations. Driven by the blocked trade flow in the Middle East and the firm price of sulfur in China, the price of sulfuric acid in some regions has risen significantly. The prices in the main production areas (including Guangxi, Anhui) have remained stable, while in Shandong, it rose by 100 yuan/ton (about 15 US dollars/ton) last week. The prices in the main consumption areas (including Guizhou, Yunnan and Hubei) have also risen by 50 yuan/ton.